There is much thought and debate as to whether or not to file for bankruptcy. It is not a decision that people take lightly. However, when you have an overwhelming amount of debt, sometimes it can be the right option. Whether you file for Chapter 7 or Chapter 13 bankruptcy, it can help you to get your head back above water again and work towards a more financially stable future.
Unfortunately, though, filing for bankruptcy is not always that straightforward. In fact, sometimes it can result in serious consequences such as having to utilize various sources of income in order to pay off as much debt as you can.
The 180-Day Rule
For the next 180 days after filing for bankruptcy, the income that you receive will become part of the bankruptcy estate. This includes an inheritance. How this plays out is dependent upon multiple factors. If your loved one passes during these 180 days, whatever you are entitled to becomes a part of the bankruptcy estate. Regardless of how much time it actually takes to receive the money or property to which you are entitled, so long as you became entitled to it during this time period, it is still considered part of the bankruptcy estate.
If you receive an inheritance within this 180-day period, you are obligated to tell the bankruptcy trustee and you must also amend certain bankruptcy forms. The correct form is dependent upon what type of asset that you inherited (property, money, etc.).
Bankruptcy Filing and Exemptions
One of the ways in which you can still keep an inheritance that is part of your bankruptcy estate is if the assets in question are covered by any of the bankruptcy exemptions. In Ohio, you may retain up to a certain value of cash, vehicles, jewelry, household items, equipment and tools, and home equity. You are also entitled to $1,250 worth of other property.
If your spouse receives an inheritance, what will happen to it is determined based upon whether or not you and he or she filed for bankruptcy together or individually. If you file individually, your spouse’s inheritance is not included in the bankruptcy estate. However, if you and your spouse file together, it will be included. In order to protect the inheritance, your spouse should maintain it separately.
Miami Valley Bankruptcy Helps Those in Ohio Who Are Dealing with Bankruptcy and Inheritances
Dealing with bankruptcy and its consequences can be very stressful, but losing an inheritance to your bankruptcy estate can be overwhelming. Regardless, the process can prove quite complicated. That is why it is so important to consult with a knowledgeable and experienced Ohio bankruptcy attorney. At Miami Valley Bankruptcy, we can help you to navigate the process. To learn more or to schedule a free consultation, visit us online or call us today!